Corporate responsibility consultant Andreas Zamostny explains how and why, in spite of or even because of the COVID Crisis, sustainability is being embraced as an enabler of product innovation and value creation.
A recent Session of Afera’s digital 63rd Annual Conference on sustainability and circularity addressed the value of knowledge sharing and why sustainability must be done in collaboration with the complete adhesive tape value chain. Andreas Zamostny, co-founder and managing partner of Schlange, Zamostny & Co. GmbH, “consultants for corporate responsibility”, as well as vice president of S&C North America Inc., explained which supply chain aspects contribute to a sustainable product, how procurement can be empowered to practice sustainable supply chain management and what the advantages of collaboration along supply chains are.
1. Sustainability is not an “add-on” but a necessity for surviving in the market
For managers, companies and the Industry sector as a whole, sustainability is good management practice—“an indispensible element of business”. Unlike the business climate of a decade or 2 ago, sustainability is no longer a strategic option—embracing it is necessary for survival. Global megatrends, including the emerging importance of climate, health and social issues addressed in the U.N. Sustainable Development Goals and other legislation like the European Green Deal, combined with increasing customer demands for product responsibility, have brought sustainability to the fore in business.
Sustainability is now a pillar of corporate responsibility in core business, balancing environmental, social and economic aspects of a company’s own operations and those of the supply chain. Capital markets are increasingly asking for environmental social governance (ESG) data and information, and corporate social responsibility (CSR) is now linked to corporate citizenship, i.e. community engagement of a company related to its core business.
Important to this is understanding all stakeholder needs and global market developments. “What we have learned is that despite a global pandemic, companies and organisations recognise and are committed to adopting processes to transform their operations to meet future challenges, to being more resilient and sustainable and advocating the transparency that goes along with that,” emphasised Mr. Zamostny. “The COVID Crisis has added to a better and very necessary understanding of risk and chances based on the environmental, social and economic impacts, helping companies to make better decisions in order to withstand the next crisis.”
2. Knowledge about impacts is necessary to prioritise sustainability topics
Sustainable supply chain management is therefore an indispensible element of a business’ sustainability strategy. From a company perspective, what are your production, liability and reputational risks (“hot spots”) in your supply chain now and going forward? These 3 clusters of risks need to be known before you can react to and manage them. Tape-related companies need to know about impacts, such as total CO₂ output, throughout the value chain of the Industry, from raw materials extraction to processing. Where are the emissions generated? What is my own company’s CO₂ impact, and how can I change this within my product or materials bought in up- and downstream?
Perhaps you as a company have a smart idea about a product or method that allows you and other companies and industries to lower their carbon footprint? And perhaps impacts cannot always be clearly quantified, but you must at least build an understanding about impact and measurement in order to prioritise sustainability topics. Most companies cannot handle the overload of sustainability topics, so try to stay focussed and prioritise. Mr. Zamostny offered tape-related companies a guide on “identification of supply and value chain stages” (see slide 22).
3. Integrate sustainability in procurement decisions and implement a sustainable supply chain management
At your company’s strategic level, it is important to manage actively supply chain elements based on sustainability impacts, i.e. supplier selection, manufacturing rationalisation, logistics optimisation and product design. Mr. Zamostny described the building blocks for implementing supply chain management step by step. His methodology can be adapted to your company based on your most relevant issues and then modified for suppliers who must report on their fulfilment of your requirements.
4. Sustainable process and product innovation is teamwork
Having worked on projects with Afera Members, Mr. Zamostny said he believes in knowledge sharing, because no single company or department can solve every challenge connected to sustainability, which is highly complex. This means not only better communication with suppliers and clients, but greater interaction among colleagues from market research and sales, R&D, sustainability and production, perhaps in a dedicated company working group.
5. Define what a sustainable adhesive is
Regarding sustainability, it is always important to create a clear picture of what you are addressing within your company and sector together with your customers. What are your company’s sustainability claims and requirements? What does your company stand for—what are your values specific to process, product design and application? What do you want from your suppliers and partners? Companies are increasingly defining performance thresholds for sustainability that suppliers must fulfil in order to stay in business.
6. Accelerate knowledge-building about value chains, materials and footprints
Who fulfils your requirements? With the increased awareness of purchased materials (footprints), their sources and processing (availability, prices), as well as the procurement markets, the (1st tier) suppliers and their sustainability performance (supplier audits), and general sustainability standards, purchasers can influence how sustainable a product is. It is important to note that not each and every aspect of the supply chain can contribute to making a product or process more sustainable. But this essential building and transferring of knowledge directly empowers purchasers to support product innovation.
7. Share results and intensify exchange with clients
Monitoring suppliers through audits, self-assessments and corrective measures, and reporting this information back to your customers and other stakeholders strengthens your business. Depending on the sector, Mr. Zamostny believes that co-operation along our supply chains can work. A more open stance toward innovation, i.e. development of products with suppliers and customers (and knowing what your customers expect to achieve with your suppliers), should become the norm, because as the complexity of the world and business grows, you will need the knowledge from your partners to arrive at the right sustainable product and application.
8. Sustainability is a journey towards transformation
Implementing sustainability in the supply chain requires time, patience and is associated with challenges. The implementation of sustainable supply chain management is therefore often only executed according to customer requirements and legislation, i.e. it is risk-driven. However, sustainable supply chain management can be an enabler of product innovation and value creation. Mr. Zamostny emphasises that every company and sector has to adapt to increasing values in sustainability. “We will all have to transform to stay in business over the next decades, but for some of you, you may just be starting up action in this field,” he concluded. “It is important to remember that sustainability is a journey of development over time.”